Silicon Valley Commercial Space, Q3 2019
October 18, 2019 – Silicon Valley is continuing to develop more new commercial space, and there has been a resurgence of R&D development within the region. Year-to-date completions have already exceeded 2018 totals, and many of those developments were preleased at the time of delivery. The square footage of two warehouse/distribution developments completed in Fremont combined was greater than the industrial development in any other quarter over the past 21 years. The completion of these two new industrial developments (and because neither was preleased at the time of delivery) contributed to a sharp rise in industrial space vacancy rates in Q3, which hit a four-year high. Increases in asking rents for Silicon Valley office space may have been affected by displaced downtown San Jose tenants and the growing demand by life science tenants. Overall rate increases, however, have been tempered by lower-end space that tends to sit on the market longer.